That brings us to the matter of translating vision into reality. If you're growing quickly, things can get sloppy. A Philadelphia TV station recently did a weeklong series of reports highlighting shoddy service at local franchises, and even our visit to a local Jiffy Lube turned up problems (see "Our Reporter Gets Lubed," page 3). Hindman admits he has had to buy back some outlets that were not performing, adding, "our complaint rate is infinitesimal, but, yes, we are human."
Investors may be concerned by all this, but Hindman is not. He says this rapid growth -- and correspondingly rapid rise in debt -- was to be expected. If you are going to grow quickly, you have to make the deal now. You can always clean up the balance sheet later. The perfect site for a Jiffy Lube is available for only so long. "I took the same approach that Patton did," says Hindman. "I said we are going to take every inch of ground we can, and then battle to hang on."
And besides, he adds, you can already see the benefits of being number one. Because of the company's rapid growth, Jiffy Lube has been able to put together a meaningful customer database that has already paid off in two significant ways.
Having realized that women -- especially working women -- are key customers, Jiffy Lube is making sure they'll never again be taken for granted. You'll see more women in the company's ads now, and shop-floor cleanliness is being stressed as never before. "If the place is dirty," says Hindman, "women won't go in."
Second, the rapid growth has given Hindman enough money to provide his franchisees with a computer system that can track a big company's fleet-maintenance needs. Corporate service now accounts for 12% of revenues for some franchisees.
In Hindman's view, the strategy of being number one has paid off, whatever the financial repercussions.
But the battle is far from won. Jiffy Lube still has to reduce debt and maintain market share. That may not be as easy as Hindman thinks. Since he is now three times larger than his nearest competitor -- Quaker State Corp.'s Minit-Lube Inc. -- he can expect the battle against him to be waged on price. You can already see the effects. Last year, revenue per car serviced fell a smidgen -- from $27.78 to $27.63 -- as a result of price pressure. Indeed, there is now a permanent line marked on each customer's bill on which employees can deduct for the dollars-off coupons that price competition has forced Jiffy Lube to issue. The premium you can charge as number one goes only so far.
If Hindman's strategy is right, eventually the competition will be defeated, or at least reduced to not much more than a nuisance. The question is: how long will it take?
FIRST RITES
How to behave like a market leader
While you can find handbooks on accounting, finance, and yes, even marketing, there is no primer on becoming the number-one competitor in a marketplace. Here are the rules Jim Hindman created for Jiffy Lube.
* If you're going to be number one, act like it. Hindman insists that his employees be friendly, their service quick, and their uniforms spotless. "If you look like you don't care, people think you don't care, and pretty soon you act as if you don't care."
* Be consistent. Each store or outlet should look like every other. The message should be: the quality care you got in Boise will be matched in Bayonne.
* Keep things clean. "Bathrooms to me are a very personal matter," says Hindman. "We market clean toilet seats. Clean bathrooms say something about an organization." So do gum wrappers in the parking lot and inventory thrown carelessly about.
* Get on TV as soon as you can. People may believe what they read, but they believe what they see on television even more. A critical part of Hindman's strategy was to get on TV as quickly and as often as possible. The company spent nearly $11 million for TV ads last fiscal year and is expected to spend $16 million for this fiscal year, which ended in March. This is, Hindman acknowledges, a double-edged sword. "Consumers expect that what they see on television will be what they find when they go in for an oil change."
OUR REPORTER GETS LUBED
It's nice to be number one, but can too much growth lead to breakdowns in performance?
Spelling out your ground rules for becoming number one is one thing; executing the strategy can be something else, as we discovered when we visited the Jiffy Lube on Route 35 North in Hazlet, N.J.
To get to the service bay, the driver must position his car on a grate under which employees work. One person told us to drive straight, while another said to turn the car to the left. We apparently listened to the wrong one, because both employees yelled at us. From there it was downhill.
The lead technician told us we needed our manual-transmission fluid changed. When told that our car, a 1981 Honda Prelude, had had an exhaustive tune-up just 10,000 miles before, she said the fluid still needed changing. "The manufacturer says it should be done every 7,500 miles." Based on that, we agreed to spend the additional $14.95.
It turns out we wasted our money. The owner's manual -- which we checked later -- suggests that the fluid be changed every 30,000 miles.
We couldn't even find solace by running away to the bathroom. Although the floors and mirror were clean, there was no toilet paper.
There was at least one piece of good news, however. We got out of the shop when promised.
We left with a bill of $45.48, the unneeded transmission fluid having boosted the basic $27.95 charge by more than half.
On the way out we noticed the Shell station next door was advertising an oil change for $17.99.
